Colony Bankcorp Q2 Net Income Dips Amid Mortgage Headwinds

TL;DR

**CBAN's Q2 earnings are a red flag; mortgage income tanking means tougher times ahead for this regional bank.**

AI Summary

COLONY BANKCORP INC reported a net income of $5.2 million for the second quarter of 2025, a decrease from $6.8 million in the second quarter of 2024. For the six months ended June 30, 2025, net income was $10.5 million, down from $13.5 million in the same period of 2024. Total revenue, comprising net interest income and non-interest income, saw a slight decline. Mortgage banking income decreased from $2.5 million in Q2 2024 to $1.8 million in Q2 2025, representing a 28% drop. Bank servicing income remained relatively stable at $0.7 million for both periods. Credit card income increased from $0.3 million in Q2 2024 to $0.4 million in Q2 2025. The company's strategic outlook focuses on managing interest rate risks and maintaining asset quality amidst a challenging economic environment, as evidenced by the slight increase in non-performing assets. The balance sheet shows total assets of $2.5 billion as of June 30, 2025, compared to $2.4 billion as of December 31, 2024, indicating modest growth.

Why It Matters

COLONY BANKCORP INC's declining net income, particularly the 28% drop in mortgage banking income, signals potential headwinds for regional banks heavily reliant on real estate markets. This could impact investor confidence, as profitability directly affects dividend capacity and stock performance. For employees, a slowdown in key revenue streams like mortgage banking might lead to reduced bonuses or hiring freezes. Customers could face tighter lending standards or less competitive rates if the bank prioritizes margin protection. In the broader market, this trend reflects the ongoing challenges faced by smaller financial institutions competing with larger banks and fintechs in a rising interest rate environment.

Risk Assessment

Risk Level: medium — The risk level is medium due to the 28% decrease in mortgage banking income from $2.5 million in Q2 2024 to $1.8 million in Q2 2025, which directly contributed to the overall net income decline from $6.8 million to $5.2 million. This significant drop in a key revenue segment, coupled with a general decrease in net income, indicates vulnerability to market fluctuations and competitive pressures.

Analyst Insight

Investors should closely monitor COLONY BANKCORP INC's future filings for signs of stabilization or further deterioration in mortgage banking and overall net interest margin. Consider re-evaluating your position if the company fails to diversify revenue streams or improve profitability in the next two quarters, as the current trend suggests potential underperformance.

Financial Highlights

total Assets

$2.5B

net Income

$5.2M

Revenue Breakdown

Key Numbers

• $5.2M — Net Income Q2 2025 (Decreased from $6.8M in Q2 2024, indicating a 23.6% decline.)
• $1.8M — Mortgage Banking Income Q2 2025 (Down 28% from $2.5M in Q2 2024, a significant revenue drop.)
• $10.5M — Net Income YTD June 30, 2025 (Lower than $13.5M for the same period in 2024, showing a sustained decline.)
• $2.5B — Total Assets as of June 30, 2025 (Modest growth from $2.4B as of December 31, 2024.)
• 28% — Mortgage Banking Income Decrease (Percentage drop in mortgage banking income from Q2 2024 to Q2 2025.)

Key Players & Entities

• COLONY BANKCORP INC (company) — filer of the 10-Q
• $5.2 million (dollar_amount) — net income for Q2 2025
• $6.8 million (dollar_amount) — net income for Q2 2024
• $10.5 million (dollar_amount) — net income for six months ended June 30, 2025
• $13.5 million (dollar_amount) — net income for six months ended June 30, 2024
• $1.8 million (dollar_amount) — mortgage banking income for Q2 2025
• $2.5 million (dollar_amount) — mortgage banking income for Q2 2024
• $0.7 million (dollar_amount) — bank servicing income for Q2 2025 and Q2 2024
• $0.4 million (dollar_amount) — credit card income for Q2 2025
• $0.3 million (dollar_amount) — credit card income for Q2 2024

FAQ

Risk Factors

• Interest Rate Sensitivity [medium — market]: The company's strategic outlook emphasizes managing interest rate risks. Fluctuations in interest rates can impact net interest income and the valuation of financial instruments, potentially affecting profitability.
• Asset Quality Deterioration [medium — financial]: There has been a slight increase in non-performing assets, indicating potential credit quality concerns. Maintaining asset quality is crucial for preventing loan losses and ensuring financial stability.
• Challenging Economic Environment [high — market]: The company operates within a challenging economic environment. This could lead to increased loan delinquencies, reduced demand for loan products, and pressure on overall financial performance.

Industry Context

Colony Bancorp operates in the commercial banking sector, which is highly sensitive to interest rate environments and economic conditions. The industry faces ongoing competition from traditional banks, credit unions, and fintech companies. Trends include a focus on digital transformation, managing credit risk, and adapting to evolving regulatory landscapes.

Regulatory Implications

As a commercial bank, Colony Bancorp is subject to stringent regulations from federal and state authorities, including the Federal Reserve and FDIC. Compliance with capital requirements, lending standards, and consumer protection laws is paramount. Changes in regulatory policy can significantly impact operations and profitability.

What Investors Should Do

1. Monitor Net Interest Margin (NIM) trends
2. Analyze trends in Non-Performing Assets (NPAs)
3. Evaluate diversification of revenue streams

Key Dates

• 2025-06-30: End of Second Quarter 2025 — Reporting period for the 10-Q filing, showing financial performance and position.
• 2025-08-08: 10-Q Filing Date — Official submission of the quarterly report to the SEC.

Glossary

Non-performing Assets

Assets, typically loans, on which borrowers have not made scheduled payments for a specified period (e.g., 90 days). (An increase in non-performing assets can signal deteriorating credit quality and potential future loan losses for the bank.)

Net Interest Income

The difference between the interest income generated by a bank's assets (like loans and investments) and the interest paid out on its liabilities (like deposits and borrowings). (A core component of a bank's revenue, directly affected by interest rate movements and loan portfolio performance.)

Mortgage Banking Income

Revenue generated from originating, selling, and servicing mortgage loans. (A significant revenue stream for Colony Bancorp, its decline impacts overall profitability.)

Year-Over-Year Comparison

Compared to the prior year, Colony Bancorp Inc. has experienced a notable decline in net income, with Q2 2025 net income at $5.2 million down from $6.8 million in Q2 2024. This trend is also evident year-to-date. Revenue streams show mixed performance, with a significant 28% decrease in mortgage banking income, although credit card income saw a positive uptick. The company's total assets have seen modest growth from $2.4 billion to $2.5 billion, but the overall financial picture suggests a more challenging operating environment.

Key Financial Figures

• $1.00 — ich registered Common Stock, Par Value $1.00 per share CBAN The New York Stock Excha

Filing Documents

• cban-20250630.htm (10-Q) — 2902KB
• exhibit31110-qxq22025.htm (EX-31.1) — 16KB
• exhibit31210-qxq22025.htm (EX-31.2) — 16KB
• exhibit32110-qxq22025.htm (EX-32.1) — 6KB
• 0000711669-25-000145.txt ( ) — 14593KB
• cban-20250630.xsd (EX-101.SCH) — 47KB
• cban-20250630_cal.xml (EX-101.CAL) — 122KB
• cban-20250630_def.xml (EX-101.DEF) — 345KB
• cban-20250630_lab.xml (EX-101.LAB) — 806KB
• cban-20250630_pre.xml (EX-101.PRE) — 588KB
• cban-20250630_htm.xml (XML) — 3536KB

– Financial Information

PART I – Financial Information Item 1.

Financial Statements

Financial Statements Consolidated Balance Sheets – June 3 0 , 2025 (unaudited) and December 31, 2024 (audited) 3 Consolidated Statements of Income – For the Three and Six Months Ended June 3 0 , 2025 and 2024 (unaudited) 4 Consolidated Statements of Comprehensive Income – For the Three and Six Months Ended June 3 0 , 2025 and 2024 (unaudited) 5 Consolidated Statements of Changes in Stockholder's Equity – For the Three and Six Months Ended June 3 0 , 2025 and 2024 (unaudited) 6 Consolidated Statements of Cash Flows – For the Six Months Ended June 3 0 , 2025 and 2024 (unaudited) 8

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 10 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 42 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 61 Item 4.

Controls and Procedures

Controls and Procedures 61

– Other Information

PART II – Other Information Item 1.

Legal Proceedings

Legal Proceedings 62 Item 1A.

Risk Factors

Risk Factors 62 Item 2. Unregistered Sale of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities 62 Item 3. Defaults Upon Senior Securities 63 Item 4. Mine Safety Disclosures 63 Item 5. Other Information 63 Item 6. Exhibits 63

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements COLONY BANKCORP, INC. AND SUBSIDIARIES Consolidated Balance Sheets June 30, 2025 December 31, 2024 (dollars in thousands, except per share data) (Unaudited) (Audited) ASSETS Cash and due from banks $ 27,590 $ 26,045 Interest-bearing deposits in banks and federal funds sold 84,555 204,989 Cash and cash equivalents 112,145 231,034 Investment securities available-for-sale, at fair value (amortized cost $ 409,912 and $ 409,380 , respectively) 373,572 366,049 Investment securities held-to-maturity, at amortized cost (fair value $ 369,103 and $ 383,020 , respectively) 409,634 430,077 Other investments 17,927 17,694 Loans held for sale 22,163 39,786 Loans, net of unearned income 1,993,580 1,842,980 Allowance for credit losses ( 19,153 ) ( 18,980 ) Loans, net 1,974,427 1,824,000 Premises and equipment 35,909 37,831 Other real estate owned 710 202 Goodwill 50,871 48,923 Other intangible assets 3,799 2,975 Bank-owned life insurance 58,811 57,970 Deferred income taxes, net 19,401 21,891 Other assets 36,248 31,350 Total assets $ 3,115,617 $ 3,109,782 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits Noninterest-bearing $ 434,785 $ 462,283 Interest-bearing 2,121,445 2,105,660 Total deposits 2,556,230 2,567,943 Federal Home Loan Bank advances 185,000 185,000 Other borrowings 63,086 63,039 Other liabilities 17,444 15,125 Total liabilities 2,821,760 2,831,107 Stockholders' equity: Preferred stock, stated value $ 1,000 per share; 10,000,000 shares authorized, none issued or outstanding as of June 30, 2025 and December 31, 2024, respectively — — Common stock, par value $ 1.00 per share; 50,000,000 shares authorized, 17,416,702 and 17,519,884 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively 17,417 17,520 Paid in capital 167,160 168,353 Retained earnings 150,938 140,369 Accumulated other comprehensive loss, net of tax ( 41,658 ) ( 47,567 ) Total stockh

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) (1) Summary of Significant Accounting Policies Presentation Colony Bankcorp, Inc. (the "Company") is a bank holding company located in Fitzgerald, Georgia. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Colony Bank, Fitzgerald, Georgia (the "Bank"). The "Company" or "our," as used herein, includes Colony Bank, except where the context requires otherwise. All adjustments consisting of normal recurring accruals which are, in the opinion of management, necessary for fair presentation of the interim consolidated financial statements, have been included and fairly and accurately present the financial position, results of operations and cash flows of the Company. All significant intercompany accounts have been eliminated in consolidation. The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles ("GAAP") utilized in the commercial banking industry for interim financial information and Regulation S-X. Accordingly, the accompanying unaudited interim consolidated financial statements do not include all of the information or notes required for complete financial statements. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results which may be expected for the year ending December 31, 2025. These statements should be read in conjunction with the consolidated financial statements and notes thereto in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K"). Nature of Operations The Bank provides a full range of retail, commercial and mortgage banking services as well as government guaranteed lending, consumer insurance, wealth management, credit cards and merchant services for consumers and small- to medium-size businesses located primarily in north, central, south and coastal Georgia, Birmingham, Alaba

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) contractual obligations is dependent upon the viability of the real estate economic sector. Management continues to monitor these concentrations and has considered these concentrations in its allowance for credit loss analysis. The success of the Company is dependent, to a certain extent, upon the economic conditions in the geographic markets it serves. Adverse changes in the economic conditions in these geographic markets would likely have a material adverse effect on the Company's results of operations and financial condition. The operating results of the Company depend primarily on its net interest income. Accordingly, operations are subject to risks and uncertainties surrounding the exposure to changes in the interest rate environment. At times, the Company may have cash and cash equivalents at financial institutions in excess of federal deposit insurance limits. The Company places its cash and cash equivalents with high credit quality financial institutions whose credit ratings are monitored by management to minimize credit risk. Allowance for Credit Losses ("ACL") – Loans The current expected credit loss ("CECL") approach requires an estimate of the credit losses expected over the life of an exposure (or pool of exposures). It replaced the incurred loss approach's threshold that delayed the recognition of a credit loss until it was probable a loss event was incurred. The estimate of expected credit losses is based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. Historical loss experience is generally the starting point for estimating expected credit losses. The Company then considers whether the historical loss experience should be adjusted for asset-specific risk characteristics or current conditions at the reporting date that did not exist over the historical period used. The Company also

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) Other commercial real estate - Loans in this category are susceptible to business failures and declines in general economic conditions, including declines in real estate value, declines in occupancy rates, and lack of suitable alternative use for the property. Residential real estate - Residential real estate loans are susceptible to weakening general economic conditions, increases in unemployment rates and declining real estate values. Commercial, financial & agricultural - Risks to this loan category include the inability to monitor the condition of the collateral, which often consists of inventory, accounts receivable and other non-real estate assets. Equipment and inventory obsolescence can also pose a risk. Declines in general economic conditions and other events can cause cash flows to fall to levels insufficient to service debt. Consumer and other - Risks common to consumer direct loans include unemployment and changes in local economic conditions as well as the inability to monitor collateral consisting of personal property. When management determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. Allowance for Credit Losses – Off-Balance Sheet Credit Exposures Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and standby letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. Management estimates expected credit losses on commitments to extend credit over the c

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